Abstract
During the last \(40\) years, a large number of studies have analyzed car holding and use behavior. Most of these ignore the dynamics of household and driver needs that very likely drive such decisions. Our work builds up on a disaggregate (compensatory) approach using revealed choices to address these dynamics. We develop a dynamic discrete/continuous choice model of car holding duration for forward-looking agents. We estimate this model using French panel survey data. Our findings indicate that a household’s time preference is a crucial element in car use and holding decisions.
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Notes
With a slight abuse of definition, we will use the term fleet in this paper to indicate the stock of cars that an household owns.
If a new car enter in the household’s fleet this is accounted in the fleet size and a new decision process starts for this new vehicle.
It is known that the normality assumption is not adapted for income.
We acknowledge that the hypothesis of normal errors, proposed in the literature, is more credible for the considered problem. However, as probit results are generally proportioned to the logit ones and the latter interpretation is easier than the former, the errors here are considered as logistic.
We suggest that it is not completely true. When a single-vehicle household chooses to scrap its sole vehicle, it effectively chooses to end its motorization. Thus, the household can consider that its inclusion in the panel is no longer useful for the survey’s purpose and exit, thereby causing non-random attrition.
The reader may contact the authors whenever he/she desires to obtain any of the estimated transition matrices regarding fuel prices.
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Acknowledgments
We gratefully thank Maria Kuecken, University of Paris 1 Panthéon-Sorbonne/Paris School of Economics, for her remarks and suggestions.
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Cernicchiaro, G., de Lapparent, M. A Dynamic Discrete/Continuous Choice Model for Forward-Looking Agents Owning One or More Vehicles. Comput Econ 46, 15–34 (2015). https://doi.org/10.1007/s10614-014-9449-4
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DOI: https://doi.org/10.1007/s10614-014-9449-4